The prospects for small combined heat and power plants in remote and isolated territories

4 may 2018 | Rossiyskaya Gazeta

According to the Rossiyskaya Gazeta, which quotes an Analytical Center bulletin, when it comes to the discussion about the modernization of the power industry special attention has always been paid to co-generation: that is when heat and power are produced together by the same power plant. "Both large scale and small scale co-generation has a future, and it should also be noted that the latter can run on nuclear power or on renewable energy sources," Analytical Center expert Irina Pominova said in an interview with a Rossiyskaya Gazeta correspondent.

Irina Pominova
Irina Pominova
Department for Fuel and Energy Sector

According to the expert, the use of large scale co-generation facilities (large CHP plants) in Russia is dictated by the cold climate, uneven population density and concentration of production facilities. Co-generation makes the largest contribution to the generation of heat in the Volga and Siberian Federal Districts (44 and 42% respectively); it plays a noticeable role in Moscow (42%) and Saint Petersburg (32%), while the average share of co-generation in total heat production in Russia is 36%.

Since 1995 the production of heat by co-generation plants has fallen by 19% and sales of electricity have gone down by 4% since 2010. The trend towards less use of combined heat and power generation in both heat and power production suggests a gradual decline in capacity utilization, which, when combined with the increasing wear and tear of the equipment, is driving up costs per unit of power generated. As the efficiency of use by the producers declines and the total capacity utilization of co-generation plants falls, utilities pass these extra costs on to consumers through higher rates, the analysts believe.

One possible solution to the problem of inefficient use of co-generation capacity could involve a transition to smaller plants located nearer to the consumers. According to Ms Pominova, small co-generation plants would be best suited for regions with low population densities as well as in remote and isolated territories. In addition to the construction of new small co-generation plants, modernization of old big plants and construction of new big plants also remain profitable. These projects can pay off both in situations where energy resources can be procured cheaply as well as in big cities where demand for energy is projected to increase, Analytical Center analysts believe.

"Development of co-generation is going to depend first of all on the effectiveness of measures to make co-generation projects more attractive to investors. Last year saw the start of the introduction of a new market model for heat and now we need to coordinate regional and municipal authorities to implement this model in practice," Ms Pominova believes.

For the time being natural gas remains the main fuel for co-generation plants in Russia (74%)­. As for whether co-generation can use renewable energy sources, Ms Pominova believes that this kind of co-generation plants could be very much in demand in the Arctic. The expert also is of the opinion that these kinds of projects have great export potential.

The Prospects of Co-Generation bulletin

Source: The Rossiyskaya Gazeta